CSE Diary for 05.07.2012
“Market plunges further as interest rates rise…”
The increase in the T-Bill rates seems to have hastened the market plunge as the broader index marked its fifth consecutive stay in the red. The climbing interest rates continue to weigh on the movement of the bourse with an increasing number of investors switching to fixed income investments. The ASPI dipped as much as 40.3 points, hitting an intra-day low of 4,906.31 points, before experiencing a mild recovery to settle at 4,924.61 points. Losses in market favorites; Aitken Spence, John Keells Holdings and Distilleries Company of Sri Lanka contributed to the decline.
The S&P SL20 heavy weights proved to be quite active, positioning themselves amongst the top five performers for the day. Following some interest in Dialog Axiata last week, the counter secured the day’s sole off-market deal as 7.5 mn shares were seen crossed at LKR6.2. The deep market slump led the counter to shed 31.1% from its 52-week high of LKR9.0, taking the counter to now trade at a forward PER of 9.0X on 2012E earnings. The leading mobile operator went on to see two further sizeable deals totalling to 3.6 mn shares taking place on board at LKR6.2. A few mid-sized deals executed in Chevron Lubricants at 1:00 p.m. in the market, propelled the counter to place second in the top turnover list. Selling pressure in the counter led its share price to slip 0.4% to close at LKR169.0.
Further buying interest was visible in the non-voting share of Commercial Bank of Ceylon following active foreign play yesterday as the counter saw a deal carrying 238.8k shares picked up on board at LKR73.0. The share gained 0.5% to close at LKR74.0 whilst similar interest in DFCC Bank led the counter to gain 4.5% at its close of LKR109.9. Meanwhile, two notable quantities in John Keells Hotels amounting to 208.5k shares were also seen picked up in the market at LKR12.0 whilst 133.2k shares of Expolanka Holdings changed hands at LKR5.9 in a single on board deal. Further accumulation in Nestle (Lanka) led the counter to appreciate LKR26.6 to close at LKR1,200.1 whilst a total of 38.3k shares changing hands in Carsons Cumberbatch.
European Stocks Little Changed Before ECB Decision while Asian Stocks Decline On Europe Economic Slowdown Concern: The Stoxx Europe 600 Index (SXXP) gained 0.1% to 257.7 at 11:12 a.m. in London whilst the MSCI Asia Pacific Index (MXAP) retreated 0.1% to 119.13 as of 5:13 p.m. in Tokyo, with almost five shares falling for every four that rose.
Oil Rises To One-Month High As Strike Halts Norway Output: Oil rose to its highest in a month in London as Statoil ASA (STL), Norway’s largest oil producer, prepared to halt production from the country as employers locked out striking platform workers after mediation talks failed. Oil for August delivery on the New York Mercantile Exchange was at USD88.19 a barrel in electronic trading.